EROAD Scales Back North American Expansion to Refocus on Australia-NZ Market

EROAD (ASX: ERD) has announced a major strategic realignment to concentrate growth investment in Australia and New Zealand, targeting emerging opportunities in electronic road user charging (eRUC) as governments transition to usage-based infrastructure funding models.

The company will scale back expansion in North America following slower-than-expected enterprise sales and will redeploy resources to accelerate development in its core markets.

Chief executive officer Mark Heine said the shift leverages EROAD’s established leadership in New Zealand’s eRUC system and positions the company to capture a once-in-a-generation opportunity as both countries modernise their transport funding frameworks.

Executive Changes to Support Growth

To guide the new strategy, the board has appointed John Scott as executive chair, effective immediately.

A technology industry veteran and former chief executive officer of Invenco, Mr Scott joined EROAD’s board in February 2025 as an independent director and will revert to non-executive chair after a transition period of up to nine months.

He succeeds Susan Paterson, who steps back to serve as a director and chair of the people and culture committee.

Mr Heine will continue as chief executive officer, while co-chief executive officer Mr David Kenneson will depart at the end of October to pursue personal and professional interests.

Mr Scott said his expanded role would help EROAD move quickly to capture the eRUC opportunity and support execution at a pivotal moment for the business.

FY26 Guidance and Impairment

EROAD said near-term financial guidance reflects the change in strategic focus and continued weakness in the North American market, now expecting FY2026 revenue of $197–203 million, annualised recurring revenue of $175–183m, and a free cash flow margin of 5–8%.

It also expects to record a non-cash impairment of up to $150m against intangible assets related to its North American operations.

EROAD said its expertise in GPS-based road user charging provides a strong platform to capitalise on the growing demand for equitable, sustainable road funding models.

The company currently manages about $1 billion in annual road user charges for the New Zealand government and is in a strong position to support the planned transition of all 4.6 million vehicles in the country to a distance- and weight-based charging system.

Mr Heine said the combination of favourable policy settings, established technology, and strong customer relationships underpins EROAD’s confidence in its regional growth plans, adding that the company remains committed to profitable expansion while maintaining operational discipline and free cash flow generation.